Tethys Petroleum Press Release: Corporate Update
Tethys Petroleum Limited (“Tethys” or the “Company”) (TSX:TPL)(LSE:TPL) September 16 announces a corporate update.
As previously announced on September 2, 2016 the Company continues to work with Olisol to complete the private placement of 181,240,793 shares at C$0.054 per share for proceeds of C$9.8 million whilst at the same time evaluating other funding arrangements. At present Olisol owns 15.76% of Tethys’ ordinary shares and if the private placement is completed would own 42.03% of the enlarged share capital.
On September 9, 2016 Olisol provided US$2.94 million working capital funds to the Company in addition to the previously announced US$452,000 provided during the week ended September 2, 2016. The total working capital loan from Olisol now stands at US$5.70 million and Olisol has indicated that it wishes to use the proceeds from the repayment of the loan to satisfy a portion of the C$9.8 million subscription price due for the private placement. The Company plans to complete the private placement with Olisol once the remaining funds due have been received and all other conditions of closing have been met. These conditions include compliance with the offering and placement requirements of the Kazakhstan Stock Exchange in accordance with Republic of Kazakhstan legislation. The Investment Agreement has an outside date of October 27, 2016 unless extended.
Kazakhstan legal proceedings
As previously announced on August 24, 2016 the Court dismissed the claim brought against the Company and its subsidiaries in Kazakhstan and ordered the lifting of the seizure order over the Company’s assets. The claimant lodged an appeal on August 29, 2016 which is scheduled to be heard on September 26, 2016. Until the claimant’s appeal is heard restrictions remain in place over the operation of the Company’s bank accounts in Kazakhstan.
Tajikistan arbitration proceedings
As previously announced, Total and CNPC, the Company’s partners in Tajikistan, filed for arbitration proceedings at the International Court of Arbitration in relation to the Company’s cash call defaults and the partners’ notice to the Company to withdraw. The partners are seeking to enforce the withdrawal notice and their claim for damages of US$9.0 million (and continuing) plus costs. The Company has submitted its response to the request for arbitration and has made a counter-claim against the partners of US$10.1 million.
At the present time the partners and the Company have appointed their respective arbitrators and are in the process of jointly agreeing the third independent arbitrator who needs to be appointed before arbitration proceedings can commence.
Tethys is focused on oil and gas exploration and production activities in Central Asia and the Caspian Region. This highly prolific oil and gas area is rapidly developing and Tethys believes that significant potential exists in both exploration and in discovered deposits.
Olisol is headquartered in Almaty, Kazakhstan and its subsidiaries and affiliates have investments in energy and oil and gas operations in the Russian Federation and Kazakhstan. Olisol has worked with Tethys in Kazakhstan for over seven years, is joint owner of the Aral Oil Terminal with Tethys and has its own fleet of special oil trucks involved in oil transportation from Tethys’ oil field. Olisol, through its affiliates, is engaged in railroad transportation, processing of oil, storage and sale of oil products.